IACPM Survey Shows Insurer SRT Protection Rose 59% in 2025

Credit risk insurers protected €4.7 billion of significant risk transfer, or SRT, tranches in 2025, up 59% from €2.7 billion in 2024, according to the International Association of Credit Portfolio Managers’, or IACPM’s, latest Global SRT Insurer Survey published today.

The survey, based on responses from 14 global (re)insurance groups, recorded 96 unfunded protection participations executed during the year, up from 78 in 2024, covering 69 underlying securitizations against 53 the prior year. Since 2019 participating insurers have executed around 300 unfunded protection contracts, representing €10.9 billion of outstanding insured tranches at year-end 2025 and supporting risk sharing on approximately €366 billion of underlying bank loans.

Business finance continued to dominate insurer participation. Large corporate and small-and-medium-enterprise loans made up 58% of new business in 2025. Residential mortgages accounted for 20% of newly protected portfolios and 24% of outstanding underlying exposures at year-end.

Som-lok Leung, IACPM executive director, said the mortgage share reflects growing insurer comfort with the asset class and a natural asset-liability match, as insurers tend to prefer longer-dated risk than other fund investors. He noted that a significant share of the growth is concentrated in one insurer for which mortgage risk is a core specialization, rather than reflecting a broad-based shift across the panel.

Geographically, the insured book stayed concentrated in Europe. EU economies with more than 1 trillion euros of nominal gross domestic product accounted for 37% of protected loan pools at inception, with other EU countries adding a further 26%. Europe outside the EU, mostly the United Kingdom, made up 12% and the United States 17%, with Canada, Asia and other markets together accounting for the remainder.

Bilateral transactions rose to 30% of insurer participations in 2025 from 18% in 2024, while syndicated transactions fell to 70% from 82%.

Leung said the largest five participants account for a substantial share of the volume. He linked part of the shift to familiarity with unfunded guarantee structures built up over time, noting that development agencies were among the earliest users of unfunded guarantees, applying them to meet policy goals around capital formation in specific geographies, while insurance companies are newer entrants that have built up the capability over roughly the last six years.

Within syndicated deals, insurers took larger individual shares on average, rising to 30% from 27%, pushing the average exposure retained per participating insurer up to €50 million. Average tranche thickness rose to €142 million.

Risk appetite remained conservative despite the volume growth. Average attachment and detachment points moved only modestly, from 2.8%-7.5% in 2024 to 2%-7.9% in 2025.

The IACPM said future growth depends less on insurer willingness to provide protection than on banks’ ability to achieve efficient regulatory capital relief from unfunded coverage. Survey respondents forecast approximately 50% growth in protections executed in 2026, with more than 50% growth expected for corporate, SME and asset-based finance portfolios and around 37% for residential mortgages. Median underwriting appetite per participation stood at €85 million, with individual capacity ranging from €20 million to €300 million, above the current average commitment of €50 million.

The survey’s growth findings sit against unresolved EU negotiations over insurer eligibility. At the July 7 trilogue, negotiators agreed in principle to lower the minimum size threshold for insurers and reinsurers to qualify as eligible unfunded credit protection providers under the STS framework to €10 billion. Third-country equivalence for non-EU-domiciled reinsurers remained absent from the formal trilogue record, and credit quality treatment – whether tested only at inception or on an ongoing basis – was also left unresolved.